Converge Advisory Group

CONFIDENTIAL

© Converge Advisory Group

An introduction to a cutting-edge advisory firm

Actionable strategies for life sciences

February 2017

2 CONFIDENTIAL


Biopharmaceutical companies face a number of ever-

increasing challenges

The R&D cost per new drug approval has increased by 80% between 2002 and 2015.

In 2014, 88% of US prescriptions were filled by generics at a cost of $65B while the remaining 12% were filled by branded rugs at a staggering cost of $312B.

17 18 19 33 33

9 11 15

10 12 $58

$108

$128 $135 $141

$0

$50

$100

$150

0

25

50

75

2002 2006 2009 2012 2015

BLA Approved

NCE Approved

R&D Spend

Drug Discovery

Development Cycle

While the timelines for drug

discovery have remained fairly

consistent, drug development

timelines have increased by

30% between 2004 and 2014.

Source: EvaluatePharma®; Nature Biotechnology; Tufts Center

for the Study of Drug Development; Converge Advisory Group

Analysis

Higher R&D Costs Longer Development

Times

Greater Price Pressure

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These challenges require companies to continuously

rethink their strategies throughout an assets’ lifecycle

The Lifecycle

Discovery Regulatory Pre-Clinical Clinical Commercial Post-Marketing

(New Indications / Combo Therapies)

3. Detailed Collaborative Design

4. Knowledge Transfer &

Implementation

2. Iterative Analysis &

Conceptual Design

1. Scoping and Measurable Objectives

Iterative Feedback and Refinement

Strategy Development and Refinement

4 CONFIDENTIAL


Strategies should be based on more insightful evidence

to improve the probability of success

Trends

Acquiring INSIGHTFUL and

TARGETED EVIDENCE

quickly and based on

broader and deeper data

sets and information

sources.

Underlying Needs

Leveraging systems,

services and products, to

gain ACCESS TO

MATERIAL INFORMATION

for successful market

differentiation.

Transforming data into

PRIVILEGED

INFORMATION to make

informed decisions on

strategic and competitive

tactics.

All stakeholders are

holding a magnifying

glass to value: value to

customers; value to

patients; value to payers;

value to the market.

Partnerships are

abounding: from pharma to

service providers; care

systems to practices; public

to private.

A significant focus on

“Big Data” - more

practically “Smart Data”:

leveraging multiple data

sources; larger data sets;

and multiple data

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Consulting firms are expected to provide dynamic and

iterative support but the economics are not aligned

Traditional Consulting Firms

Converge Advisory Group Difference

Artificial intelligence

displaces costly analysts

Expertise right-sized for

each engagement

Optimized search and

methods for best impact

No active seeking of low

cost, high value solutions

Drive delivery to lowest

level team member

Need to bill for full teams

for high utilization rates

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The Converge Advisory Group’s guiding principle is to

quickly transition evidence to actionable strategy

Converge Advantage

Research

Apply relevant quantitative and

qualitative analytic research methods

Analyze 2-5x more

information and data

points

Insights

Develop scientific, clinical,

commercial, and regulatory insights

Create inflection

points, not data points

Strategy

Provide strategic guidance to

maximize asset and portfolio value

Formulate clear actions

25-40% faster

7 CONFIDENTIAL


We work with clients on developing strategies

throughout the lifecycle…

Indication

• Unmet Needs - Clinical /

Patient

• Competitive Landscape

• MOAs

• Current Trials

• Leading Rx

P&R

• Current Landscape, by

Indication

• Current and Future

Implications (HC

systems, potential

partnerships, etc.)

• Value-based Outcomes

• Health Economic

Factors (ICER, QALY)

Patients

• Patient Challenges

• Current Patient Care

and Care Providers

• Socio-economic Burden

• Quality of Care

• Patient Sentiment

BD&L

• Patentable inventions

• Investor Profiles

• Market Landscape /

Prioritization of Highest

Opportunity Markets

• Financial Valuation

• Risk Assessment

• Buyer Assessment

Launch / Commercialization

• Scenario Analyses

• KOL Mapping

• Revenue Forecast

• Valuation Models

(DCF/NPV)

• Decision Support

Models

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…across three target client stakeholder groups

Pharma/Biotech

R&D and Commercial

• Develop actionable

strategies based on

holistic assessment of

scientific, clinical and

commercial information

• Advise across the

lifecycle on multiple

fronts: MOA / indication

assessments; CDPs;

forecasting scenarios;

pricing/reimbursement;

launch requirements;

competitive threats

BD&L / M&A

VC/PE/CorpDev groups

• Assess and screen

assets and analyze

indication nuances to

inform financial and risk-

based models

• Focus on commercial

viability of potential

deals

(acquisition/divestiture/

partnership/licensing)

Biotech Start-ups

Executive Management

• Provide cost-effective

strategy directions to

better manage cash and

VC expectations

• Serve as a sounding-

board on operational

aspects of the business

9 CONFIDENTIAL


We start by establishing critical questions with our

clients to serve as strategic building blocks

Early-Stage

Development

Lead indication?

Stratification of

targeted indications?

Most-prevalent

unmet need

Implications?

Clinical feasibility,

including patient

recruitment?

Initial commercial

viability, by

indication?

Commercial

Market assessment

and dynamics?

Stakeholder unmet

needs?

HTA requirements?

Past decisions?

Comparative

effectiveness?

Needs for value

dossier creation?

Regional variations?

Payer/provider

sentiment? Value

evidence?

Comparative P&R?

Competitive

implications?

Late-Stage

Development

Payers/provider

sentiment? What

value evidence is

required?

Market Access

strategy to be

deployed?

Product price?

Assumptions?

Current and

projected

competitive

implications?

In-license or out-

license an asset?

BD&L

IP strategy?

Buy rights? Divest?

Investor / partner

landscape?

Comparative

investments?

Royalty projections?

Market potential?

Best opportunities?

Financial projections

/ value?

Real and inferred

risk?

List not intended to be exhaustive

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Then we consider the entire universe of data sets

Your Strategic Questions

Scientific / Clinical Literature

Customer/Physician Perspectives

Patient Perspectives

Health Economics Payer / Provider

Perspectives

Competitive Landscape

Clinical Environment

Commercial Factors

…and then layer in our 40+ years of experience to derive specific

strategic inflection points for our clients to leverage.

We “CONVERGE’” ALL critical factors leveraging artificial intelligence…

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And strategically identify the right data sets, of which a

majority already exists

Social Media

Multitudes of people place opinions

on treatment, drugs, outcomes and

trade-offs on social media

• Twitter

• Patient / Physician Social Networks

• Disease discussion forums

Informed Opinion

Finance, medical, scientific,

regulatory professionals generate

reams of personal opinions to

inform others

• Blogs

• News Releases

• Whitepapers

• Financial / market analyst reports

Intelligent Inferences

Smartly analyzing data can lead to a

significant amount of evidence,

leading to quick inferences

• Asset / TA Benchmarking

• Comparable Analysis / Effectiveness

• Market Potential / Value

Published Data

Scientists, clinicians, payer medical

advisors, regulatory authorities only

care about published, peer-reviewed

literature as gold standard for

decision-making

• PubMed

• Conference Abstracts

• Regulatory authority guidelines

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Finally, we converge machine and human intellect to

develop strategic inflection points…

Evidence-based solutions

with traceable logic

Supplement with external

primary research as needed

Layer in expert human

analysis to sift strategically

Machine learning to filter

at super-human scale

Inflection Points &

Recommendations

• “80/20 rule”: 20% of the data usually

holds 80% of the value so we

optimize efforts to smartly analyze

the most valuable data quickly

• Perform the bulk of data

aggregation and analysis

leveraging artificial intelligence

• Strategically supplement with

external primary research

using ‘micro-surveys’

• Infer sets of inflection points

for fast strategic

recommendations

Why needlessly pay consulting /

MR firms to do background

research, at the limits of human

analysis, and then validate with

KOLs to generate insights?

80% of firms DO NOT do this: they focus on billable hours & are tech-averse

Social

Media

Informed

Opinion Published

Data

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…allowing us to deliver better and much faster results,

with a far greater return on investment

We take the best of strategy and market

research firms….

Market / competitive intelligence

Domain expertise

Quant models and strategic frameworks

Hypothesis-based solutions

Deep client interactions

Executive-level deliverables

…then exclude low-value activities

o Junior-level team members doing 70% of the work

o Drive towards a firm’s utilization metrics

o High ramp-up times on disease areas

o Charging for less-than optimized primary research

o Encyclopedic deliverables without clear actions

Converge Advantage

• We leverage artificial intelligence to

analyze disparate data, broadly and

deeply…in days, not weeks.

• We employ a hybrid resource model

to keep costs at a minimum while

acquiring the highest functional

expertise on-demand.

• Our leadership has a ‘hands-on’

approach since junior consultants

haven’t developed strategic search

skills, the ability to draw value-add

inferences or assess risk based on

their limited experience.

• We have launched products,

managed growth strategies,

designed and implemented life-

cycle strategies, unlike most

consultants without any operational

experience.

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Leadership Team

Robert co-founded and serves as a Managing Director with the Converge Advisory Group and

has over 20 years helping clients drive improved business performance in their U.S. and global

operations.

Prior to co-founding the Converge Advisory Group, Robert was a Principal and member of the

New York Leadership Team of Quintiles Advisory Services. Previously, he founded the Bedrock

Consulting Group, a specialty consulting firm focused on global operations strategy. Robert also

held leadership positions with PwC (formerly PRTM) and Archstone Consulting.

Robert’s client work includes a full range of engagements across the product lifecycle with a focus

on clinical and commercial strategies, organizational transformation, and business analytics. His

client experience includes large pharmaceutical, biotech and medical device companies, as well

as midsize and pre-commercial organizations.

Bachelor’s in social sciences, SUNY-Oneonta; Hofstra MBA

Robert S. Liebman, MBA Managing Director [email protected]

Subha co-founded and serves as a Managing Director with the Converge Advisory Group and has

over 20 years of academic, industry and consulting experience.

Prior to co-founding the Converge Advisory Group, Subha held senior positions with Decision

Resources Group, Quintiles Advisory Services, Frost & Sullivan and Becton Dickinson.

Subha has extensive exposure to opportunity assessment, emerging markets and strategy

development in pharma, bioprocessing, medtech and biosimilars sectors.

Bachelor’s in biochemistry, Berkeley; PhD in neuroimmunology, SUNY-Brooklyn

Post-doctoral Fellowship in neuroscience, Stanford; Carnegie Mellon MBA

Subha B. Basu, PhD/MBA Managing Director [email protected]

mailto:[email protected]

mailto:[email protected]

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A sampling of our capabilities…

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We can perform due diligence at a different scale

Autoimmune / IBD

Chimeric / Cell Malignancies Tumor Cells / Metastases

Stem Cell / Regen Med

Cell Culture Production

Immunotherapy / Orphan

Potential M&A Targets

(Immunotherapy Companies: 366)

Focused Area

of Interest

Lead

Investors

Investment

Amounts

For Illustrative Purposes Only

17 CONFIDENTIAL


We can dissect scientific and medical literature

efficiently to generate key themes and focal points

Comparison of retinal nerve fiber layer measured by

time domain and spectral domain optical coherence

tomography in optic neuritis.

Nerve fiber layer and macular thinning measured

with different imaging methods during the course of

acute optic neuritis.

Acute optic neuritis: retinal ganglion cell loss

precedes retinal nerve fiber thinning.

Memantine for axonal loss of optic neuritis.

Key themes for Acute Optic Neuritis:

Analysis of 1653 PubMed Articles

Stratification of most important papers:

Rapid-fire title and abstract screening


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We can provide targeted clinical insights for single and

multiple indications extremely quickly

What are the Lead Interventions (Rx)? What Types of Outcomes Exist?

Who are the Lead Sponsors? What is Enrollment Across Phases?


19 CONFIDENTIAL


We can baseline commercial dynamics with the latest

economic findings

Source: ISPOR Abstracts (1740), 2016

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Payers always prefer to use published data as reference points for formulary decisions:

Quality Adjusted Life Year (QALY) & Incremental Cost-Effective Ratios (ICER) are the leading metrics


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